Management control for A&C
Content
Week 1.....................................................................................1
Lecture and literature (Chapter 1)....................................................1
Week 2.....................................................................................3
Literature (Chapter 2)......................................................................3
Ouchi et. al......................................................................................5
Lecture............................................................................................6
Week 3.....................................................................................8
Literature (Chapter 9)......................................................................8
Lecture............................................................................................9
Week 4.................................................................................... 11
Guest lecture – Belsimpel/Gomibo...................................................11
Week 5.................................................................................... 12
Literature (Chapter 10)...................................................................12
Simons and Dávilla (2021)..............................................................14
Lecture..........................................................................................16
Week 6.................................................................................... 17
Literature (Chapter 4 & 5)..............................................................17
Lecture..........................................................................................19
Week 7.................................................................................... 20
Literature (Chapter 3)....................................................................20
Judge & Zapata (2015)....................................................................21
Lecture..........................................................................................22
Literature...............................................................................24
Week 1
Lecture and literature (Chapter 1)
Management control is steering’ an organization in such a way that the
organization’s goals are realized
Systematic process by which the organization’s higher-level managers
influence the organization’s lower-level managers (or employees) to
implement the organization’s strategy
, The goal is to have effective execution of the firm’s strategy and higher
organization performance on the long-term
Two main functions of management control
- Top-down role
- Bottum-up role
Why is management control important?
Organizational goals are set by top management
- Decentralized managers do not automatically understand the goals,
so they do not know how to contribute to these
- Decentralized managers do not automatically agree with the
organizational goals and strategies
- Decentralized managers do not automatically have the resources
needed to act in line with the organizational goals
In short: not understanding, not aligning and no resources
Examples management control (lecture answers):
1. T1 & T2, B1 & B2
2. T1 & T2, B1 & B2 (“Social control”)
3. T3 & T1, B2 & B3
4. T2
5. T2, B1
6. Not a management control! (Everything related to design and vision
is not management control, it starts when the goal is already clear!)
MCS: Management control systems are defined as the systematic way in
which an organization exercises management control
- Comprise all arrangements, tools and techniques that enable top-
down and bottom-up control
- Determine the emphasis on specific control types
- Determine the activities to accomplish management control
Types of controls:
Combination of these controls are called “packages”
- Formal
o Output controls
o Behavior controls (in the book: throughput control)
- Informal
o Personnel controls (in the book: input control)
o Cultural controls
These two are clan controls
Interdependencies: different types of MCS that are interacting with each
other (see C & D), how more they interact, the more they are working
together
Independent effects: they conflict each other, they can both have other
effects (and can be supplementary, conflicting or redundant)
, Complements (+): compenseren, versterken, inschakelen and
substitutes (-): remmend, verergerd, aanzettend
Focus on compensating, reinforcing and enabling (rather know the
difference between interdependencies and independent)
Examples interdependencies
A: Not together, behavior controls reduce autonomy and output controls
want to control the output
Both may not be needed. However, if behavior controls are weak, firms
either need strong output controls or strong clan controls
B: Not together, because those guidelines and monitoring are restrictive,
while cultural and personnel are more open and creativity orientated
(contradict with those restrictive standards)
Cultural controls and personnel controls typically aim to find individuals
with strong commitment that behave intrinsically in a certain way.
Restricting their autonomy may reduce their motivation and commitment
to do so.
C: May be similar to the point above. Strong output controls may work
against collaboration. It somewhat depends on how the output is specified.
D: To create a certain culture, diligent personnel selection is of utmost
importance
Week 2
Literature (Chapter 2)
Shareholder view: an organization exists to satisfy the goals of their
owners
Shareholder’s returns on investments are necessary to let the
organization survive because they provide resources, therefore they have
a higher risk than other stakeholders, because they get the residual claim
of the company
Corporate governance: (some main practices)
- Board of directors
- Financial reports
- Auditing and internal control
Content
Week 1.....................................................................................1
Lecture and literature (Chapter 1)....................................................1
Week 2.....................................................................................3
Literature (Chapter 2)......................................................................3
Ouchi et. al......................................................................................5
Lecture............................................................................................6
Week 3.....................................................................................8
Literature (Chapter 9)......................................................................8
Lecture............................................................................................9
Week 4.................................................................................... 11
Guest lecture – Belsimpel/Gomibo...................................................11
Week 5.................................................................................... 12
Literature (Chapter 10)...................................................................12
Simons and Dávilla (2021)..............................................................14
Lecture..........................................................................................16
Week 6.................................................................................... 17
Literature (Chapter 4 & 5)..............................................................17
Lecture..........................................................................................19
Week 7.................................................................................... 20
Literature (Chapter 3)....................................................................20
Judge & Zapata (2015)....................................................................21
Lecture..........................................................................................22
Literature...............................................................................24
Week 1
Lecture and literature (Chapter 1)
Management control is steering’ an organization in such a way that the
organization’s goals are realized
Systematic process by which the organization’s higher-level managers
influence the organization’s lower-level managers (or employees) to
implement the organization’s strategy
, The goal is to have effective execution of the firm’s strategy and higher
organization performance on the long-term
Two main functions of management control
- Top-down role
- Bottum-up role
Why is management control important?
Organizational goals are set by top management
- Decentralized managers do not automatically understand the goals,
so they do not know how to contribute to these
- Decentralized managers do not automatically agree with the
organizational goals and strategies
- Decentralized managers do not automatically have the resources
needed to act in line with the organizational goals
In short: not understanding, not aligning and no resources
Examples management control (lecture answers):
1. T1 & T2, B1 & B2
2. T1 & T2, B1 & B2 (“Social control”)
3. T3 & T1, B2 & B3
4. T2
5. T2, B1
6. Not a management control! (Everything related to design and vision
is not management control, it starts when the goal is already clear!)
MCS: Management control systems are defined as the systematic way in
which an organization exercises management control
- Comprise all arrangements, tools and techniques that enable top-
down and bottom-up control
- Determine the emphasis on specific control types
- Determine the activities to accomplish management control
Types of controls:
Combination of these controls are called “packages”
- Formal
o Output controls
o Behavior controls (in the book: throughput control)
- Informal
o Personnel controls (in the book: input control)
o Cultural controls
These two are clan controls
Interdependencies: different types of MCS that are interacting with each
other (see C & D), how more they interact, the more they are working
together
Independent effects: they conflict each other, they can both have other
effects (and can be supplementary, conflicting or redundant)
, Complements (+): compenseren, versterken, inschakelen and
substitutes (-): remmend, verergerd, aanzettend
Focus on compensating, reinforcing and enabling (rather know the
difference between interdependencies and independent)
Examples interdependencies
A: Not together, behavior controls reduce autonomy and output controls
want to control the output
Both may not be needed. However, if behavior controls are weak, firms
either need strong output controls or strong clan controls
B: Not together, because those guidelines and monitoring are restrictive,
while cultural and personnel are more open and creativity orientated
(contradict with those restrictive standards)
Cultural controls and personnel controls typically aim to find individuals
with strong commitment that behave intrinsically in a certain way.
Restricting their autonomy may reduce their motivation and commitment
to do so.
C: May be similar to the point above. Strong output controls may work
against collaboration. It somewhat depends on how the output is specified.
D: To create a certain culture, diligent personnel selection is of utmost
importance
Week 2
Literature (Chapter 2)
Shareholder view: an organization exists to satisfy the goals of their
owners
Shareholder’s returns on investments are necessary to let the
organization survive because they provide resources, therefore they have
a higher risk than other stakeholders, because they get the residual claim
of the company
Corporate governance: (some main practices)
- Board of directors
- Financial reports
- Auditing and internal control
